The driving force behind creating digital identity schemes

I’m often talking about digital identity and struggle with the subject. This is because the meeting of ID2020 I attended at the United Nations 18 months ago, talked about the issues of digital identity and poverty, and how the poorest are the most susceptible to human trafficking and slavery:

The good news is that the second ID2020 meeting this year actually has started work on the subject. The meeting unveiled a prototype of a digital identity network using blockchain technology , and developed by Accenture and Microsoft.

This is important as the key objective is to give everyone a legal identity, and this is part of the United Nation’s Sustainable Development Goals (SDGs) for 2030. If you’re not aware of the UN’s SDGs, there are 17 of them and provide clear guidelines and targets for all countries to adopt in accordance with their own priorities and the environmental challenges of the world at large. The SDGs are an inclusive agenda. They tackle the root causes of poverty and unite us together to make a positive change for both people and planet.

“Poverty eradication is at the heart of the 2030 Agenda, and so is the commitment to leave no-one behind,” UNDP Administrator Achim Steiner said. “The Agenda offers a unique opportunity to put the whole world on a more prosperous and sustainable development path. In many ways, it reflects what UNDP was created for.”

Within these 17 SDGs, Goal 16 is all about peace, justice and strong institutions. Corruption, bribery, theft and tax evasion cost some US $1.26 trillion for developing countries per year. Most of that lost money is caused by the judiciary and police of corrupt nations, and this amount of money could be used to lift those who are living on less than $1.25 a day above $1.25 for at least six years.

But there’s most to Goal 16, as a lot of it is about inclusive societies, and you can only have inclusive societies if no one is left behind. This means that everyone must be recognised, recorded and given a legal identity. As Goal 16.9 states:

By 2030, provide legal identity for all, including birth registration

This is what is driving investment into blockchain identities with Accenture and Microsoft. How that would work is likely based around a mobile biometric recording by local agents, stored on a shared immutable ledger. The details are still early on in process, but I keep arguing that it will be transformational for, if I can record someone’s identity digitally for almost nothing and with complete confidence, why wouldn’t I use similar systems for everyone on Earth? That’s my thinking.

And going back to why I struggle with this, is because it is heart-breaking that millions of humans are being physically abused and subjected to the worst experiences on Earth, just because we don’t record their existence. Here’s a few facts:

Globally, the average cost of a slave is $90.

Trafficking primarily involves exploitation which comes in many forms, including: forcing victims into prostitution, subjecting victims to slavery or involuntary servitude and compelling victims to commit sex acts for the purpose of creating pornography.

According to some estimates, approximately 80% of trafficking involves sexual exploitation, and 19% involves labour exploitation.

According to the U.S. State Department, 600,000 to 800,000 people are trafficked across international borders every year, of which 80% are female and half are children.

The average age a teen enters the sex trade in the U.S. is 12 to 14-year-old. Many victims are runaway girls who were sexually abused as children.

California harbours 3 of the FBI’s 13 highest child sex trafficking areas on the nation: Los Angeles, San Francisco and San Diego.

The National Human Trafficking Hotline receives more calls from Texas than any other state in the US. 15% of those calls are from the Dallas-Fort Worth area.

Between 14,500 and 17,500 people are trafficked into the U.S. each year.

Human trafficking is the third largest international crime industry (behind illegal drugs and arms trafficking). It reportedly generates a profit of $32 billion every year. Of that number, $15.5 billion is made in industrialized countries.

The International Labour Organization estimates that women and girls represent the largest share of forced labour victims with 11.4 million trafficked victims (55%) compared to 9.5 million (45%) men.

This is not just an issue over there, but over here too. For example, it is estimated that there are between 10,000 and 13,000 victims of modern slavery in the UK and many American ‘massage parlours’ are actually staffed by sex slaves. This is something that needs fixing and I truly hope that technological breakthroughs with digital identity schemes will assist in cracking down on such human abuses.

Meantime, I haven’t copied these stories onto the blog as they are too awful but, if you want to realise how serious an issue this, read these 22 accounts of how people ended up as sex slaves. It may make you also feel like doing something about it.

Chris Skinner is an independent commentator on the financial markets and FinTech. Author of the bestselling book Digital Bank and Chairman of the Financial Services Club, Chris is considered as one of the most influential people in banking and financial technology today.